Zhu Rongji's mixed legacy: Former premier blamed for some of China's biggest problems

The legacy of former Chinese Premier Zhu Rongji, a charismatic and reform-minded politician, is complex. While he is credited with paving China's way into the World Trade Organization, his policies also laid the groundwork for the country's current property bubble and exacerbated poverty in rural areas.

In 2010, local governments across China were aggressively acquiring rural land, often through forceful evictions, to sell to real estate developers. This practice, observed firsthand by the NZZ's China correspondent near Beijing, was driven by a severe cash shortage faced by these local administrations. The root cause of this financial strain was a 1994 tax reform spearheaded by Zhu Rongji, who was then a leading official.

Zhu's primary objective with the 1994 reform was to bolster the central government's financial standing. Between 1979 and 1993, Beijing's fiscal revenue as a percentage of GDP had plummeted from 28.2 percent to 12.3 percent. Zhu's reform mandated that local governments remit larger portions of revenue from corporate, income, and value-added taxes to the central government. "Zhu wanted to strengthen Beijing's power," noted analysts from the New York-based think tank Rhodium Group, and his efforts were successful, effectively doubling the central government's revenue in 1994 compared to the previous year.

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Zhu wanted to strengthen Beijing's power